Louis Letourneau looks at ways to keep the cash fresh in your relationship and not just the love.
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You met at Pride last year and then moved in together a few months later. You’re in love, and this time it’s real. Friends always talk about both of you as one. You introduce each other as respective partners wherever you go. That’s it; you are officially a gay couple, at least in the eyes of society. You’re now starting to wonder what to do with your finances, here are some tips.
Many gay men entering a new, long-term relationship may already have their own flat or house. Often, they start by commuting between the two until the time comes when it makes more financial sense to move in with each other. If you don’t want to rush, it may be a good idea to start letting out one of the properties – at least for a while, until you know for sure that the relationship will work. Sleeping and partying together is one thing, living together every single day is another. Currently, gay couples have the advantage, in that they can elect two permanent residences and then claim the capital gains exemption on the sale of their property. This can be done up to three years after leaving your property, so you have time on your side.
But, once you know that things are working out, you start to plan for the future, even think about buying a place together. For most couples, it’s preferable to buy a property on a Joint Tenancy, which means that if one partner dies the house reverts to the other one without passing through the estate. And, by the way, while you are in front of a solicitor, make sure you draw up a Will and an Enduring Power of Attorney. You don’t want a distant cousin from Australia coming in and taking half of your possessions if your partner dies.
Then, you need to think about protecting each other. Since your finances are now interdependent, you should really consider life insurance, at least to protect the mortgage, but also consider critical illness cover and income protection in case you become ill. The younger you are, the cheaper it’ll be – and it can be very cheap these days. In fact, even if you’re single and still reading this article, you should really have an income protection plan and critical illness cover. If you become ill, who’ll take care of you financially? Whatever you do, you must come to a gay specialist before applying for life insurance or other protection plans – if you don’t, you may end up with a nasty discriminatory surprise.
Once this is in order, many couples open joint bank accounts, mainly to cover the bills but also to save for the future. At this stage, you should really discuss how you feel about finances since this aspect of living together can create many frictions. One partner always tends to spend more than the other, so it’s important to be clear about what you pay for as a couple and what you pay individually. I always recommend getting a joint current account for household bills, where both partners contribute monthly, and to continue running your own individual accounts. This is a recipe which helps avoid arguments. However, if you’re saving for a specific purpose, a joint saving account can bring the two of you together emotionally – like a special project which becomes binding.
Finally, don’t forget to nominate each other to receive death benefits for pension purposes (normally done on an Expression of Wishes Form – available from the pension administrator or provider) – or to remove your previous partner, as the case may be. The new Civil Partnership, which will probably be available at the end of 2005, is unlikely to change the provisions which couples should make in their joint financial planning. It will just make things easier and clearer for all same-sex couples.
In the long run, your finances will tend to converge naturally, so don’t worry about it too much and enjoy life together – you deserve it.
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